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Indicate whether the statement is true or false.
1. At Fox End, people are grouped together in departments by common skills and work activities, including a sales
department and a production department. This is an example of vertical functional approach.
a. True
b. False
2. The principle of unity of command suggests that employees in an organization should be held accountable to multiple
supervisors.
a. True
b. False
3. The confusion and frustration caused by the dual chain of command is a major problem of the matrix structure.
a. True
b. False
4. Quick response to external changes is an advantage of vertical functional structure.
a. True
b. False
5. Service firms include banks, hotels, and law firms.
a. True
b. False
6. Aspects of both functional and divisional structures simultaneously in the same part of the organization are combined in
the virtual network approach.
a. True
b. False
7. Reengineering basically means preserving the past by establishing the sequence of activities by how work was done.
a. True
b. False
8. Certainty in the environment is usually associated with decentralization.
a. True
b. False
9. The framework in which the organization defines how tasks are divided, resources are deployed, and departments are
coordinated is called organizational structure.
a. True
b. False
10. Collaboration refers to the managerial task of adjusting and synchronizing the diverse activities among different
individuals and departments.
a. True
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b. False
11. Traditional views of organizational design recommend a span of management of about 7 to 10 subordinates per
manager.
a. True
b. False
12. In the divisional approach, coordination across divisions is great whereas coordination within divisions is often poor.
a. True
b. False
13. The distinctive feature of the project manager position is that the person is not a member of one of the departments
begin coordinated.
a. True
b. False
14. The pure functional structure is appropriate for achieving internal efficiency goals in a stable environment.
a. True
b. False
15. When an organization uses a differentiation strategy, it strives for internal efficiency.
a. True
b. False
16. The functional structure is appropriate when the primary goal is innovation and flexibility.
a. True
b. False
17. Organizing defines what to do while strategy defines how to do it.
a. True
b. False
18. For companies to operate effectively, the amount of centralization or decentralization should fit the firm’s strategy.
a. True
b. False
19. The trend in recent years has been toward narrower spans of control as a way to facilitate delegation.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
20. Stephanie works in one of seven research and development departments at Tara’s Terrace, Inc. This would suggest that
Tara’s Terrace has a:
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a. functional structure.
b. divisional structure.
c. wide span of control.
d. high degree of centralization.
e. matrix structure.
21. Which of the following structures works best in an uncertain organizational environment?
a. A tight structure
b. A mechanistic structure
c. A horizontal structure
d. A functional structure
e. A vertical structure
22. Makai’s Marketing Mix (MMM) does not use its resources wisely. The employees at MMM spend too much time in
meetings and not enough time focusing on the task at hand. MMM’s management should consider changing the
organizational structure from __________ to __________.
a. horizontal; vertical
b. team-based; horizontal
c. vertical; team-based
d. mechanistic; rigid
e. team-based; virtual network
23. __________ is characterized by intangible outputs.
a. Service technology
b. Mass production
c. Large-batch production
d. Small-batch production
e. Continuous process production
24. Louise works in the manufacturing department at Ice Sculptures. The work in Louise’s department is low in task
specialization. As a result, Louise:
a. usually performs a single task.
b. does a variety of tasks and activities.
c. is often bored.
d. is rarely challenged.
e. generally goofs off.
25. Which of the following typically is NOT considered a staff department?
a. Strategic planning
b. Accounting
c. Manufacturing
d. Human resources
e. Research and development
26. With a(n) __________ strategy, the organization attempts to develop innovative products unique to the market.
a. differentiation
b. integration
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c. reengineering
d. cost leadership
e. defensive
27. The functional, __________, and __________ are traditional approaches that rely on the chain of command to define
departmental groupings and reporting relationships along the hierarchy.
a. divisional; teams
b. divisional; matrix
c. matrix; teams
d. matrix; networks
e. teams; networks
28. Jacob, a customer service representative for AB Retailers, has seven levels of management between himself and the
company’s CEO. In contrast, his friend Rhonda, a customer service representative for YZ Retailers, has only four levels
of management between her and the company CEO. Compared to YZ, Jacob’s company has which of the following types
of organizational structure?
a. Narrow
b. Wide
c. Flat
d. Tall
e. Identical
29. Innovative Creations Corporation is designed along functional lines. New product development is very slow, and the
process is plagued by many problems. One of the problems is that the people in marketing never communicate with the
people in production. This is an example of poor:
a. coordination.
b. planning.
c. motivating.
d. leading.
e. controlling.
30. Flash Card Inc. recently underwent a significant company-wide change that involved revision of its manufacturing and
leadership processes. The result of this was a stronger emphasis on horizontal coordination. This level of change is
referred to as:
a. reorganization.
b. reengineering.
c. e-engineering.
d. strategic planning.
e. corporate structuring.
31. Walt works for a large company. Recently, his organization began to contract out such functions as training,
engineering, and computer service. This approach is consistent with a __________ structure.
a. functional
b. team
c. divisional
d. virtual network
e. service
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32. Organ Rentals Corporation has been having numerous problems. Communication across departments is poor and
decisions are backing up at the top of the organization. Organ Rentals uses a __________ structure.
a. geographic
b. product
c. functional
d. matrix
e. team-based
33. Which of the following factors is NOT associated with larger span of control?
a. Work performed by subordinates is stable and routine.
b. Subordinates perform similar work tasks.
c. Subordinates are located at various locations.
d. Subordinates are highly trained and need little direction.
e. Rules and procedures defining task activities are available.
34. All of the following are advantages of a divisional structure, EXCEPT:
a. high concern for customers’ needs.
b. fast response, flexibility in an unstable environment.
c. emphasis on overall product and division goals.
d. development of general management skills.
e. there is little duplication of services across divisions.
35. Which of the following is a contemporary approach to structural design in departmentalization?
a. Functional
b. Divisional
c. Traditional divisions
d. Teams
e. Geographic-based
36. __________ departments include all of those that provide specialized skills in support of __________ departments.
a. Line; staff
b. Staff; line
c. Primary; functional
d. Functional; primary
e. Line; functional
37. The matrix structure violates which of the following principles of management?
a. Unity of direction
b. Unity of command
c. Work specialization
d. Division of labor
e. Span of management
38. Swift Move Facilities manufacturers two different bicycle models. The company produces a high volume of products
using standardized production runs. The company does very little product customization. Swift Move uses which of the
following types of technology structure?
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a. Service production
b. Mass production
c. Large-batch production
d. Small-batch production
e. Continuous process production
39. Rebecca works for a company that has clearly defined lines of authority. Each employee knows that he or she has
authority and responsibility for a distinct set of tasks. Employees are also aware of the company’s reporting structure as
well as successive management levels all the way to the top. Rebecca’s company follows which of the following
principles?
a. Specialization principle
b. Unity of command principle
c. Scalar principle
d. Authority principle
e. Responsibility principle
40. Which of the following structures is most consistent with a strategy of stability?
a. Team-based structure
b. Organic structure
c. Matrix structure
d. Functional structure
e. Learning structure
41. The __________ delineates the chain of command, indicates departmental tasks and how they fit together, and
provides order and logic for the organization.
a. management chart
b. employee directory
c. structural table
d. administrative chart
e. organizational chart
Enter the appropriate word(s) to complete the statement.
42. __________ is the process managers use to transfer authority and responsibility to positions below them in the
hierarchy.
43. __________ production involves the production of goods in batches of one or a few products designed to customer
specifications.
44. The degree to which organizational tasks are subdivided into individual jobs is called __________.
45. With __________, decision authority is pushed downward to lower organization levels.
46. __________ is the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to
achieve organizationally desired outcomes.
47. __________ teams consist of employees from various functional departments who are responsible to meet as a team
and resolve mutual problems.
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48. When people from two or more departments work together to produce outcomes that meet a common goal, this is
referred to as __________.
49. The __________ combines aspects of both functional and divisional structures simultaneously, in the same part of the
organization.
50. __________ is the radical redesign of business processes to achieve dramatic improvements in cost, quality, service,
and speed.
51. In the __________ approach of structural design, departments are independent, contracting services to the central hub
for a profit.
52. A(n) __________ is a temporary team or committee designed to solve a short-term problem involving several
departments.
53. __________ refers to services that are perishable and, unlike physical products, cannot be stored in inventory.
54. The __________ is the number of employees reporting to a supervisor.
55. A(n) __________ structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels.
56. A(n) __________ is a person who is responsible for coordinating the activities of several departments for the
completion of a specific project.
57. A(n) __________ structure is the grouping of positions into departments based on similar skills, expertise, work
activities, and resource use.
58. The visual representation of an organization’s structure is called the __________.
59. List the advantages of the virtual network structure.
60. Describe service technology.
61. List three disadvantages of the divisional structure.
62. List the three basic types of production technology.
63. What is(are) the difference(s) between cross-functional and permanent teams?
64. Compare and contrast authority, responsibility, accountability, and delegation.
65. What is the team approach to departmentalization, and what are its main disadvantages?
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Answer Key
1. True
2. False
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26. a
27. b
28. d
29. a
30. b
31. d
32. c
33. c
34. e
35. d
36. b
37. b
38. b
39. c
40. d
41. e
42. Delegation
43. Small-batch
44. work specialization
45. decentralization
46. Authority
47. Cross-functional
48. collaboration
49. matrix approach
50. Reengineering
51. virtual network
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